GDP is forecast to grow by around 1½ per cent this year and in 2018. Our forecasts have been revised lower since August.

Annual consumer price index inflation peaks at 3.2 per cent in the final quarter of this year before easing back to the target rate of 2 per cent in the second half of 2019. The risks to that forecast are tilted to the downside.

We expect the Bank of England to raise the policy rate by 25 basis points this month and again every six months until Bank Rate reaches 2 per cent.

The strengthening and broadening of the global economic recovery are on track, and the revisions to our August forecast are minor.

But global growth this year and next seems likely to be as good as it gets. The medium-term outlook is still for growth below pre-crisis rates.

While short-term risks to our growth forecast seem balanced, for the medium term they seem tilted to the downside.

The past 25 years have been characterised by a surge in international trade as economies have become increasingly inter-linked. In many advanced economies this surge has been associated with increased import competition from low-wage economies. This paper explores the effects of such competition on manufacturing jobs in the UK. We consider two developments that influenced the nature of international trade: the ascendency of China as an important player in global markets and the accession to the European Union of a number of Eastern European economies in 2004. Both of these changes were associated with a shift in trade regimes and led to a sharp rise in import competition in particular UK manufacturing sectors. We find that these changes are likely to have hastened the decline of UK manufacturing.

The value of exports to the domestic UK economy does not equal gross export flows, as some of the value-added within UK exports may have been generated abroad. For key business and financial service industries we present new and initial estimates giving a lower bound for the value-added component of exports generated directly by the domestic exporting sector, called the direct domestic value-added component of exports. Our initial estimates suggest that at least 38 per cent of UK monetary financial institutions (MFIs) exports in 2016 was direct domestic value-added amounting to £14.6bn, of which £5.0bn came from exports to the EU. These initial estimates suggest that approximately 80 per cent of accountancy and legal services exports in 2014 were direct domestic value-added amounting to £1.7bn and £5.2bn respectively, of which £500mn and £1.7bn came from exports to the EU respectively.

This paper studies local economic impacts of the increases in trade barriers associated with Brexit. Predictions of the local impact of Brexit are presented under two different scenarios, soft and hard Brexit, which are developed from a structural trade model. Average effects are predicted to be negative under both scenarios, and to be more negative under hard Brexit. The spatial variation in negative shocks across areas is higher in the latter case as some local areas are particularly specialised in sectors that are predicted to be badly hit by hard Brexit. Areas in the South of England, and urban areas, are harder hit by Brexit under both scenarios. Again, this pattern is explained by sector specialisation. Finally, the areas that were most likely to vote remain are those that are predicted to be most negatively impacted by Brexit

This paper considers two aspects of this question. First, Brexit has already induced a devaluation of sterling of around 14 per cent since June 2016, which has started to work through to consumer prices: between June 2016 and July 2017 consumer prices increased by around 2.5 per cent. Second, while it is not government policy, nor the desire of the UK public, that the outcome of negotiations is a ‘MFN Brexit’, this remains a distinct possibility. Thus we ask how the imposition of tariffs on imports from the EU will work through into consumer prices. Making very conservative assumptions, we conclude that ‘MFN Brexit’ will increase the average cost of living by around 1 per cent and increase it for 8 per cent of households by 2 per cent or more. We present results for different groups of households according to their employment and structural characteristics and show that the impact will generally be largest on unemployed, single parent and pensioner households.

The UK's automotive industry has been one of the ‘star performers’ of the UK economy in recent years – unlike most other manufacturing sectors. Output has increased by over 60 per cent since 2010 and there has been over £8 billion worth of investment in the industry in the past five years. The industry supports some 800,000 jobs in the UK. It is seen as having benefitted from EU membership. So what might Brexit mean for the UK automotive sector, and its workers? This paper considers short-run impacts, before turning to the impact of uncertainty on foreign direct investment inflows and then the nature of a possible trading relationship. Some brief reflections on policy implications round off the paper.

We analyse TFP growth in the US business sector using a basic unobserved component model where trend growth follows a random walk and the noise is a first order autoregression. This is fitted using a Kalman-filter methodology. We find that trend TFP growth has declined steadily from 1.5 to 1.0 per cent per year over the past 50 years. Nevertheless, recent trends are not a good guide to actual medium-term TFP growth. This exhibits substantial variations and is quite unpredictable. Techno-optimists should not give best to productivity pessimists simply because recent TFP growth has been weak.